With every day-to-day activity becoming digitized, the mode of operation is gradually changing too. From trade by barter to the usage of cash, and now, where several options transactional actions are now available online and mobile. That said, in such a global app distribution market, it’s worthy to note the different payment methods users prefer to use to make in-app purchases in different parts of the globe.
In the world of app development and online payment methods, one of the things that bother app users is internet security. Many want to be sure that their bank details and personal data are safe from hackers. This perception of safety is highly dependant on cultural constructions, and that’s why preferred payment methods can vary significantly from place to another.
It’s easy to believe that those options that we’re aware of would be sufficient to satisfy our user’s needs. Be careful there, you could be overwhelmed with the number of payment methods available in other places and that you’re not even aware of. Unbanked users, cultural differences… the reasons for this fragmentation are many, but let’s try to break this down enough for us to understand. And we’re not talking about a little slice of the cake; according to studies carried out by CodaPay, 80% of people living in emerging markets don’t have access to credit cards.
The Two Major Modes of Payment
There are two primary modes wherein payments are processed;
- Synchronous Payment Methods
This is the method by which a payment made can be immediately confirmed successful or failed. It typically works for credit or debit card payments or PayPal. The payment processing the payment can check the availability of funds instantly and therefore confirm this to the developer end for it to grant the purchased item at the moment. It’s the most comfortable and reliable for both end-user and developers.
- Asynchronous Payment Methods
This is the method in which a payment made takes a couple of processes (that can stretch into days) before being finally confirmed successful or failed. Due to the lack of possibility by the payment processing entity to confirm the availability of funds instantly, this process is longer and more complex than the synchronous one. Quite popular among unbanked users, this type of payment method allows end-users to make a purchase in a digital environment. On some occasions, it requires the user to make the payment in a third service provider and, sometimes, even do it manually in one of such providers in the high street. During this period, the status of the payment usually appears as “in progress.”
mCommerce Payment Methods
mCommerce is an abreviation of mobile commerce. It refers to any transaction completed in a mobile device, which is mostly done in-app. From mobile banking to any form of mobile payments, mCommerce covers it all.
It is vital to understand that card payments are still the most prevalent mode of payment for in-app purchases in Western Countries. It covers the use of Mastercard, Visa, American Express, among others. However, other mCommerce payment methods are preferred in other regions and, actually, they’re gradually gaining popularity. These are some of the most popular ones:
PayPal is an alternative online and mobile payment service when compared to card payment. They allow you to sync your Paypal account to another bank account. This avails you the opportunity to make transactions on your mobile device as long as you are connected to the internet.
It’s a great option to grant purchase access to the people that don’t have a bank account ready to be used online. They can just add funds to their PayPal accounts in an easy way, and use this as their online bank account.
Payment Method Aggregators: CodaPay
Once you realize that in order to reach paying users in certain regions you need to integrate a number of payment methods and, therefore, make an investment in code on your app, you’ll consider the option to use on these aggregators.
CodaPay for example, allows app developers to make their in-app purchases available in over 100 different methods. It is specialized in emerging markets so you’ll probably get the possibility to cover most SEA countries. Of course, you’ll end up paying a fee since it is kind of externalizing your billing system, but at the end of the day, it’s only about doing the maths and check if it’s worthy. We strongly recommend having a look at it.
iZettle is a mobile commerce platform that allows for quick and easy payments from your smart mobile devices. They are out to strengthen and ease SMEs’ transactional management.
iZettle works by partnering with retail banks and telecommunications firms across Europe; hence it has its feet firmly rooted in Europe. However, it is gradually growing a global function.
Other Payment Methods
This may seem like an obvious one, however, Credit and debit cards are one of the easiest and more trusted ways to pay. Moreover, when paying with a credit or debit card, users are usually immediately informed on whether their payment was successful or not.
That said, for unbanked users this can be a difficult method, as such individuals usually rely on adults, or others who have such cards, to make in-app purchases, top-ups, transactions, and so on.
Paying with digital currencies is also an option for some payment method providers and the ones based on cryptocurrencies can actually solve some of the issues that in-app billing has shown in recent years.
First of all, blockchain technology guarantees transparency and safety; it’s almost impossible to tamper or alter a transaction. On the second hand, it removes the need for intermediaries. This can actually provide developers (and end-users) with better margins and prices. As you can expect, these types of technologies are in quite early stages but some distribution platforms, such as Catappult, have managed to create very safe and reliable products to integrate several payment methods based on a digital currency; AppCoins. They’ve actually partner with CodaPay to offer a wide variety of choices to end-users in emerging markets.
In-app purchases are quickly becoming a big thing in the world of mobile transactions and payments. But we’re entering in a fragmented field, that combines security, cultural differences and users preferences.
Digitization is bringing the world to a more accessible and mobile business environment. So, whether it will go through the synchronous or asynchronous payment methodS, the idea of in-app payment will have a long and lasting impact on the world.